Governance – Apichet Blog

The Way Thais Lead: Larry Persons 2016

Thailand is a fascinating country, with a unique culture, a long and proud history, and a bright economic future.

Unfortunately, Thailand has not always lived up to its full economic or developmental potential. Thailand has enjoyed significant growth and development over the past 30 years, and continues to mature in a measured, sustainable manner. However, peer countries such as S. Korea, Malaysia, and Singapore have previously outpaced Thailand’s development.

Dr. Larry Persons has recently published a fascinating book that carefully analyses the Thai leadership style. Dr. Persons was born and raised in Thailand, and earned a Ph.D. from the Fuller School of International Studies. He is well-qualified to research and evaluate the unique aspects of Thai leadership culture.

An important aspect of Person’s research covers the concept of “Face” as practiced and defined within Thai culture. As a fascinating introduction to Face, Person shares a riddle published by Lin in 1939: “Face cannot be translated or defined. It is like honor and is not honor. It cannot be purchased with money, and gives a man or a woman a material pride. It is hollow and yet is what men fight for and what many women die for. It is invisible and yet by definition exists by being shown to the public. It exists in the ether and yet cannot be heard, and sounds eminently respectable and solid.”

Person notes that, when stripped down to its bare essence, Face is about “the human desires for acceptance and significance. We reach out to others seeking confirmation for what we hope is true: that we are lovable enough to be included and dignified enough to be respected.”

Person observes that Face has five (5) dimensions. He spends a great deal of time patiently describing these dimensions, which are “Face Eyes”, Honor, Public Acclaim, Accumulated Goodness or Moral Strength, and Radiant Power.

The important concept of “Loss of Face” is also diligently explored and explained.

The bulk of the book is devoted to the historical and current norms of Thai leadership style. Person references a great deal of academic research to provide support for all of his observations. Person observes that the secret to true success in Thai leadership is “Rather than simply lording power over followers, leaders can choose to nurture warm relationships with them. It is an approach that preserves and perpetuates the bond between leader and follower. It lends longevity to relationship, and it also arouses a valuable sense of harmony in local collectives.” This is certainly valuable advice for Thailand executives, and is wise advice for leadership in most global cultures.

If you are an executive or in a leadership position in a Thailand based organization, or want to improve your relationships with both Thai leaders and Thai subordinates, I highly recommend this book. I strongly recommend expatriate leaders in Thailand to buy this book, and read it at least once per year during their Thailand leadership tenure. I would also recommend this book to Thai junior executives who wish to improve their leadership performance to more effectively lead Thai teams and organizations.

Frank T.

Taming Turnover

Employees are truly a valuable resource. Regardless of the type of business you operate, or the country in which you operate, every business depends on having qualified and experienced people to reliably perform all of the tasks required by the business.

It is undoubtedly true that some employment positions are more important, more vital, and contribute more directly to the overall success of the business than others. A highly competent Production Manager in many cases is more vital to the business than a General Manager or Finance Manager, because his / her company – specific technical and operational skills and leadership are key to the successful daily operation of the business. In many cases these skills cannot be replicated by an outside hire or an internal promotion without many months or years of intensive training.

However, if your business has any employees or positions that are truly non-important, than as a Manager you are being irresponsible for maintaining such positions or employees. Is the cleaning lady (or cleaning person to be politically correct) a vital position? Probably not, because an outside hire (direct employment or contract) can successfully mobilize in the position and be effective with not more than a few hours of orientation. But don’t make the mistake of thinking of a cleaning lady as being a non-important position. Try running your office or business for a few days without anyone to clean the toilets, canteen, and general office area, and you will quickly discover just how important this function is to a happy and healthy office environment.

I fondly recall one cleaning lady who worked at a factory that I managed nearly 20 years ago. She was a contractor, supplied by a maid service company, and was one of the longest serving members of the office staff. I was very proud to attend the wedding reception for her daughter, and all of us were very sad when she retired. Many tears fell in the office and around the factory site on her last day of service.

The cleaning lady wasn’t the only member of the factory “team” that had served devotedly and loyally for many years. We were very proud to have quite low turnover on our team. Thailand, where this factory was located, and where I have lived and worked for many years, has an entrenched culture of job hopping across all levels and positions. I have probably interviewed well over 1,000 employment candidates, and I have undoubtedly reviewed several times that number of employment applications. In the vast majority of cases, I observed that candidates changed jobs every 2 to 3 years. I rarely received an application from a person who had been employed by the same company for more than 5 years, let alone 20 or 30 years.

Long service employees do exist, but once an employee has stayed with a company for 4 or 5 years, he / she is quite unlikely to resign except in the case of a significant change in company environment. Such change could include financial distress, a change in technology or operation that significantly alters or eliminates the incumbent employee’s position or job responsibilities, or a change in leadership or ownership that significantly changes the culture and social environment of the workplace.

Can your company survive and achieve its full potential, if you must replace every employee, including staff, supervisory, and management positions, every 2 to 3 years? Can you provide best service to your customers and shareholders when key positions are vacant, and experienced incumbent personnel are long gone before qualified candidates can be recruited to fill the vacancies? How do you train new employees to fill positions when the experienced former employee is long gone?

Managing an industrial business, serving customers, and defending your market share against competitive challenges is difficult enough when every position on your organizational chart is filled with qualified personnel. You don’t need the additional headache of staff turnover, recruiting and training replacements, and dealing with team morale issues associated with a revolving door work environment. If these issues are all too familiar to you and your team, you must urgently find a way to promote long term loyalty and employment retention.

Reasons for Leaving

Staff retention is a complex and diverse subject. However, it can be boiled down to some simple concepts that can be applied across countries, cultures, and industries to minimize turnover and maximize staff satisfaction and loyalty.

I hear many managers complain that their staff will quit their position for a few percentage point increase in salary at a new company. I don’t doubt that this is in many cases true. However, I think many managers interpret this phenomenon in the wrong way. Most employees are not so focused on compensation that they will quit a secure position to face unknown challenges at a new company for a 2% increase in basic salary. More accurately, such employees are so dissatisfied or feel so disconnected from their current employment that it only takes the most minor incremental incentive for them to risk the unknown. In these cases, if employment conditions were to degrade further, these employees would even accept a cut in basic salary to escape from the drudgery of their current employment experience.

Look in the mirror, evaluate the employment environment that you are providing to your employees, and understand that the problem isn’t your employee’s attitude, but rather the environment that you are providing.

In other cases, employees report resigning from their current position to seek “advancement” or promotion elsewhere.

If you are managing a trade school, college, or university, you should be proud to train your “students” to best serve their future employers. However, if you are running an industrial enterprise, you must train employees to excel in their current roles, then carefully provide a career path, mentoring support, and encouragement to enable your valuable employees to grow into more responsible and challenging roles.

When an employee truly excels in his or her role, organizations often think of such employees as “invaluable”. However, they then proceed to treat these invaluable employees as hardware, plugged into a position with the expectation that they will stay plugged in until they become obsolete or burn out and require replacement. Unsurprisingly, these high performers quickly discover that other organizations also value their skills, experience, and motivation, and are willing to provide incentives including compensation and a positive work environment, to liberate them from their current indentured servitude.

Reasons for Staying

I personally believe that high performing individuals have earned the privilege of being promoted in recognition of their performance. In many cases, a linear promotion opportunity may not be available. A lab technician at your facility might excel and eventually achieve the position of lab manager. They appear to have reached the pinnacle of their career ladder, at least within the confines of your organization. However, if you ignore the career aspirations of such a high performing individual, you can be sure that eventually your lab manager will resign “seeking advancement”.

A few years ago I ran into a former colleague who was the lab supervisor in one of my factories. Shortly after I left this company, she also moved on. When I met her in a popular restaurant, she was surrounded by colleagues, all wearing the same business uniforms. I was very proud to learn that she was the Plant Manager of a well-respected petrochemical complex, and she was enjoying lunch with her loyal subordinates.

Do not place artificial limits on your valuable employees. Allow them to grow, including providing them with opportunities to branch out onto parallel career paths. Or resign yourself to being a charity training institute serving the interests of your competitors and regional peer organizations.

Retention is not just about compensation and advancement. These are certainly very important aspects of retention, but by themselves they are not sufficient to create long-term employee loyalty.

Most people, especially in collectivist cultures, greatly value connection and engagement with fellow team members. Creating a happy workplace, with an inclusive and supporting culture, is perhaps the most effective way to promote employee retention.

Does your company have a culture? Can you describe it? Do you manage and promote your company culture? Do you even give any consideration to the cultural environment of your company?

If your culture is “just another company”, a bunch of people punching the clock, doing their jobs, following procedures (or perhaps shortcutting procedures when not being closely supervised), then going home or to the pub to complain about the drudgery of their positions, then don’t expect to have any success retaining staff.

Creating a company culture takes time and effort, but it certainly doesn’t require a significant budgetary commitment. Evaluate what type of workplace environment your team would most appreciate. Treat your employees as valuable members of a team working towards a common goal. Define the goal(s), and provide objective metrics so the team can understand and evaluate their performance. Involve your team with your operating strategy, at least to the extent that is safe and prudent with respect to corporate intellectual property and financial reporting regulations. Find ways to treat your employees as fellow shareholders and stakeholders. Solicit suggestions from your team, give them serious consideration, implement worthwhile suggestions, and publicly recognize all valuable contributions.

I have been in factories where employees had no idea how their product was used by customers, or how important their product was to their customer’s success. How does your product contribute to society? If your factory makes rubber blades for windshield wipers, your product might seem to be low tech, simple, and nearly insignificant in the broad scheme of human endeavors. However, that simple blade of rubber represents an important component in each car produced by your customer. If your team doesn’t deliver the windshield wiper blades on time and fully compliant with quality parameters, the car manufacturer can’t deliver completed cars to their customers. The car owner and drivers also depend greatly on the quality and performance of the windshield wiper. A defective wiper can easily become a major factor in an accident, and innocent people might be injured, crippled, or killed. Frankly, there are no unimportant products … if your product has no significance to society, you will very soon be out of business. Be sure your team understands and appreciates the important contributions their work makes to a well-functioning society.

You undoubtedly have a sales team. I typically observe that the sales team is completely isolated from the operations team. They might as well be working for a completely different organization, serving markets and customers on a different planet. This is terribly unfortunate, because in order for the sales team to proudly and effectively represent your product or service to customers, they must understand and appreciate the hard work, dedication, and attention to detail that goes into producing these products.

Likewise, the operations team needs to understand and appreciate the importance and unique value of the products that they are producing, and how important each team member’s contributions are to the overall success of the product and company. I strongly recommend that you routinely send your sales team into the factory to “sell” your products to your operations team. Teach the team about your customers, how they use your products, what they value in your products and how your products compare with competing products. And insist that your sales team frequently visits the factory floor to gain first hand experience about the product and production process. These modest activities will significantly boost the loyalty, pride, enthusiasm, and effectiveness of all members of your team.

Regardless of industry, country, or market, I do not believe that any company has to accept high turnover as an insurmountable fact of corporate life. As a responsible, enlightened manager you must seek to clearly understand the factors contributing to employee turnover, and you must create an environment and culture in which your employees feel safe, secure, comfortable, and confident. You and your company will never realize its full potential without a loyal, stable, motivated, and happy workforce.

Avoiding Misaligned Incentives

Managers are faced with a great number and diversity of issues each day. Many of these issues require prompt resolution typically in the form of a decision or direction to be issued by the Manager to subordinates.

Good managers recognize that they must base their decisions on an objective, non-biased consideration of relevant facts and circumstances, always seeking to act in the overall best interests of the organization. Unfortunately, most managers don’t have the luxury of time and tranquility required to give each issue ample and careful consideration. Major and minor issues constantly arise in a seemingly relentless manner, and our intrepid manager must consider each issue as quickly and efficiently as possible, render a judgment or decision, and hope for the best.

Modern managers are (still) human. Artificial intelligence is not yet wielding significant influence over the decision-making process. Even the most well-intentioned and highly experienced managers are influenced by personal and organizational biases, historical precedents that may have been based on faulty premises, and pressures from subordinates or other influencers that may have motivations far removed from the best interests of the organization.

One can wish to forgive managers for not giving each issue ample and careful consideration before passing judgment. Clearly, not all issues are of vital, longterm interest to the organization. However, one must be very mindful that even seemingly minor decisions can serve as precedents upon which future issues will be considered and based. This can be especially true when a decision is related to, or can be consciously or unconsciously perverted, to serve the self-interests of the manager or other stakeholders at the expense of the Company’s best interests.

These decisions that support misaligned interests often appear to be of only minor significance and importance, and self-interested parties may actively seek to emphasize the limited significance and impact of the issue in hopes of receiving the desired decision. The less time and effort a manager invests to understand any given issue, the less likely it is that the manager will appreciate the broader or longterm ramifications of the issue.

This may sound philosophically interesting, or mind-numbingly boring, depending on your personal perspective. A common example might serve to conveniently highlight the issue.

e-Waste Recycling/ Asset Disposal

Every modern office has numerous PC’s, laptops, monitors, printers, mobile phones, and other electronic devices. These devices typically become obsolete before they physically break or cease functioning. It is not uncommon for subordinates to request permission to purchase such obsolescent equipment, and in many countries it is quite common for companies to sell obsolete equipment to employees at bargain prices.

Is this in the best interest of the company? Is this in the best interest of the employees? How should a manager consider an issue such as this, and are there any biases or misaligned incentives that could adversely influence the decision-making process?

The company’s best interests are served if all capital assets are utilized to their fullest potential. If an asset should become non-useful to the organization, the asset should be disposed of in the most appropriate manner, to generate salvage income from the asset, to protect the community and environment from adverse environmental impact, and to always recognize and respect any employee or stakeholder impact or preference.

In the case of a common laptop PC, a well-cared for laptop can function well for many years. Some maintenance may be required during the lifetime of the device, such as battery replacement, memory and/or data storage upgrades, keyboard or display service, etc. Eventually, the performance of the device may no longer satisfy the operational requirements of the user, or the cost to maintain or service the device may exceed the value of the device or may be non-competitive compared with the cost of a new replacement device.

In a well-managed organization, commodity devices such as laptop PC’s can be reassigned to different users or applications to match their performance and condition to the user or application requirements. A top of the line laptop that was suitable for a power-user such as an engineer, field service technician, external sales person, or the ego of an executive when it was purchased new may become completely inadequate for these same functions and applications just 2 or 3 years later. However, many users or applications to not require high performance, especially now that many applications are moving to cloud-based solutions. A basic laptop, even one that is 5 or 6 years old, can still run web browser software suitable to support nearly all cloud-based applications. Even a laptop with a malfunctioning display or a failing keyboard can be very satisfactorily utilized by attaching an external monitor, keyboard, and mouse.

For most organizations and applications, nearly any functional laptop, desktop, or printer can continue to be satisfactorily utilized by properly matching the aging device to the application. And when a device does fail, it can become a source of spare parts for remaining identical devices, assuming that the organization has prudently managed its device procurement strategy to standardize on equipment.

Frankly, if such a device is still functional, or still has useful parts that could be used to maintain similar devices, it should be retained by the organization. When a device no longer has any value to the organization, it should also be expected to offer very little value or interest to employees or other entity except specialized recycling contractors.

So why do so many organizations sell functional (or even non-functional) used equipment to employees?

I strongly suggest that in most cases, these decisions are being made based on misaligned incentives. Supervisors and managers are incentivized to offer used equipment to employees to promote good relationships with employees. Whereas managers should be making decisions on the basis of the best interests of the company (and happy employees are certainly in the best interest of the company), they are actually making these decisions based on self-interest, or being influenced by supervisors or subordinates who themselves are acting out of self-interest.

Does sale or auction of used IT equipment such as laptops to employees promote good relationships? Undoubtedly, there are some employees who would appreciate the opportunity to purchased a used device from the company at a bargain price, especially if the device is being offered well before it has actually reached the end of its useful life. However, the company should also seriously consider whether such a used equipment sale policy can be administered in a way that is fair for all employees? If this program is beneficial to employees, meaning that the employees can purchase the used device for a bargain price compared with other retail sources of such used equipment, then it only benefits those employees who have the interest or opportunity to participate. Employees who are not interested in used IT equipment would not benefit. How many creative programs would the company need to implement to ensure that all employees with their many diverse interests would have an opportunity to receive an equivalent benefit from the company? Good employee relationships cannot be promoted and sustained by special programs that only benefit a small percentage of the workforce.

Environmental protection is certainly an important area of best interest for a company. e-Waste is rapidly becoming a global environmental problem, and companies should ensure that their e-Waste is properly managed to minimize environmental impact. Even a small company has the resources and ability to engage with a qualified e-Waste contractor to dispose of such devices at the end of their useful life. In many cases, companies can recover a salvage value from devices that are consigned to an e-Waste contractor. However, most individual consumers are unable or unfamiliar with e-Waste solutions, especially in less-developed communities and countries. It can be easily argued that a company is failing in its environmental responsibilities when it sells, donates, or otherwise distributes e-devices to individuals or small organizations (such as churches or charity groups) that cannot or most likely will not ensure that these devices are properly recycled when they do reach their rapidly approaching end of life.

I have observed that when management implements a policy to recycle all end-of-life IT equipment utilizing a qualified e-Waste contractor, the quantity of such devices selected to be recycled significantly drops. Departments are suddenly eager to receive an old laptop or desktop that is no longer suitable for its previous function, to address unbudgeted needs or to help stretch their department budgets. Once the misaligned incentive to dispose of useful equipment is removed, incremental value can continue to be extracted from aging but still useful equipment.

To avoid misaligned incentives, managers should always carefully and critically evaluate any program or proposal that seeks to create a benefit or satisfy any unmet need or expectation in a manner that is not absolutely straightforward and transparent. The more lobbying pressure a manager receives in support of a proposal, the more careful and critical the manager must become. Do not yield to popular pressure. Never allow or attempt to create or support any program that seeks to benefit any group of employees by bypassing the budgeting process. If a program is worthwhile and in the company interest, it should be supported by a budget allocation, and all employees should have the opportunity and expectation to realize equal benefit.

Many managers, probably a majority, disagree with my position concerning sale or auction of used IT equipment. I continue to believe that this is a classic case of misaligned incentives influencing policy decisions. I strongly recommend that managers diligentlyavoid implementing misaligned policies such as this. If your organization already has such policies in place, I strongly recommend that you start taking steps to eliminate these misguided programs. If you feel that your employees need and deserve incremental benefits, then create a new benefit or supplement existing benefit programs designed to positively impact all employees.

Thai Customs Business Conference 7 July 2016

On Thursday 7 July 2016 I had the privilege of attending the first ever Thai Customs – Business Conference, which was held at the S31 Sukhumvit Hotel in Bangkok.

This conference, which was attended by around 100 conference participants from a broad range of interested stakeholders including many Chambers of Commerce, represented a refreshing outreach by the Thai Customs Department to the Thailand business community.

The recently appointed Director General of Thai Customs, K. Kulit Sumbatsiri, stated very clearly and concisely that Thai Customs needs to adjust and change from being a Tax Collector to become a Trade Facilitator, and no longer be an obstacle to trade and investment.

He also indicated in his opening remarks that Thailand can no longer count on customs tax collection as a significant source of revenue, because tariffs are being restructured to increase Thai trade competitiveness.

The Thai Customs Department is currently executing its new five year plan, titled “Future Customs 2020.” This plan will see the transformation of the Thai Customs Department to become a trade facilitator for Thailand business activities.

New initiatives that the Thai Customs Department is diligently pursuing include:

National Single Window: This has been discussed for more than ten years, but is now being diligently pursued. The National Single Window will effectively create a “One Stop Shop” for importers, where the Customs Department will be electronically linked to 36 related government agencies in a database, to allow importers to pursue import licenses from relevant agencies such as the Agricultural Department, Ministry of Industry, and even the Ministry of Public Health. The goal is to facilitate prompt and convenient import license approvals. A pilot program involving the five most frequently imported goods will soon be launched.

Pre-Arrival System: This is a system to expedite customs arrival formalities. Manifests from air and ocean shipments will be transmitted to Thai Customs six hours in advance of arrival. Thai Customs will analyze the manifests during a 4 hour period prior to shipment arrival, and pre-approve shipments for the Green Line or Red Line channels. The Pre-Arrival Process of Suvarnabhumi Airport is being used as a model. The goal is to expand this system to other airports and seaports based on the success of the Suvarnabhumi model.

Authorized Economic Operator Program (AEO): The AEO program is a successor to the previous 1999 Gold Card Scheme and the 2009 Licensed Customs Broker program. AEO was launched in 2013 upon the cancellation of the Licensed Custom Broker program. Today Thailand has 297 AEO Operators, including 147 Customs Brokers and 150 Importers / Exporters.

The advantages of AEO include exemption from physical examination except for related laws otherwise stated or in the case of suspicions. Also, AEO members will receive priority for conducting physical examinations when they are required.

Thailand is in the process of negotiating reciprocal “Mutual Recognition Arrangements (MRA)” with Hong Kong, Singapore, Malaysia, and S. Korea. Hong Kong and Thailand have already executed an MRA agreement, and a pilot operation will begin later this year.

Advanced Tariff Ruling (ATR): This is a service for importers to seek an advance ruling on tariff classification of goods prior to import into Thailand, upon a written request. This will provide certainty with regard to the correct tariff classification for imported goods. An ATR ruling is effective for two years from the date of the ruling, and will be issued within 60 official working days after application.

Digital Customs and Customs Mobile Application: The Thai Customs Department is working on a mobile application that will greatly facilitate the importation and customs clearance process.

During the conference, the Thai Customs Department officials also provided an update on recent and pending revisions to Thai Customs Laws, some of which are nearly 100 years old. Most noteworthy are incremental changes to the Rewards and Bribes laws, which will limit the size of rewards paid to Customs officials.

I very much appreciated the information and vision that was shared by the Thai Customs Department. I am cautiously optimistic that the Thai Customs Department can effectively transform itself into a modern, professional, world-class trade facilitator.

Frank T.

DigiMarketing: Wertime and Fenwick 2008

I have again visited my dusty bookshelf to review an outstanding book on Digital Marketing: “DigiMarketing – The Essential Guide to New Media & Digital Marketing” by Kent Wertime and Ian Fenwick.

In the interest of full disclosure, I studied under Dr. Ian Fenwick at the Sasin Graduate Institute, and remain to this day a big fan of Professor Ian. He is a gifted teacher, researcher, and public speaker.

Digital Marketing is a fast moving field and industry. The rate of change and pace of innovation continues to be phenomenal. I therefore found it quite interesting to review this “ancient” eight year old book. My goals were to refresh my knowledge on digital marketing, and also to gauge the changes that have occurred during the past 1-1/2 lustrum (yes, I’m a Rooster Cogburn fan).

Wertime and Fenwick pack a lot of information and wisdom into 392 pages. They organized their book into three sections: “New Media and Marketing in the 21st Century”, “Digital Channels”, and “A DigiMarketing Planning Framework”.

The Internet is a truly global phenomenon, and the core principles of Digital Marketing therefore enjoy a global relevance. One of the great challenges of engaging with a global market is to effectively use a global tool to successfully engage with prospective customers in multiple geographic and cultural markets, with different languages, different product expectations, significantly different economic opportunities and disposal incomes, etc. The digital channels are also constantly changing and evolving, and a channel which is very popular and enjoys significant penetration in one geographic market may be virtually unknown in a different market.

One of the great revelations of “DigiMarketing” is in reviewing the hot Digital Marketing channels and players in 2008 compared with 2016. Google was the king of search, and remains the dominant search engine today. However, Facebook has completely eclipsed MySpace. From 2005 until April 2008 Myspace was the largest and dominant social networking site in the world, and in June 2006 MySpace actually surpassed Google as the most visited global website. Today MySpace is little more than a footnote in the history of social media, having recently been purchased by Time, Inc.

DigiMarketing isn’t a dry, boring, academic overview of the Digital Marketing landscape. Wertime and Fenwick have succeeded in creating an engaging, lively, and frequently entertaining guide to the exciting world of Digital Marketing. Examples of light-hearted and lively topics include “Cookies You Can’t Eat”, “Long-Tail Wags the Dog!”, and “Lies, Damned Lies, and Statistics”.

DigiMarketing remains a fantastic Digital Marketing reference book for anyone who is involved in the Digital space, or wishes to better understand the brave new world of Digital.

Frank T.

Lean Manufacturing that Works: Bill Carreira 2005

Some books are worth reading a second time.

I was recently inspired to pull this book off my office bookshelf, dust it off, and read it again. This book contains a great deal of wisdom for managing a manufacturing operation. I’m quite happy I took the time to revisit this book, and refreshed my competency in Lean Manufacturing Principles.

Bill introduces the key principles of Lean Manufacturing. One of the most important principles is Customer Value. Regardless of the activity, whether a manufacturing step, logistics, inventory, administrative step, etc., the key concept of customer value is whether the activity adds value for the customer. “Does this activity directly contribute to my customer’s product’s becoming more complete, and is the customer paying for this activity to occur?” If either question generates a NO answer, why are you doing it?

The next concept is the Value Stream, which is defined as “the total cycle of activity, from initial customer contact through receiving payment for a product that has been delivered.” Careful evaluation of the value stream allows the manager to identify and prioritize opportunities for genuine cost reduction without compromising product quality, reliability, or other desirable product attributes.

The principles of “flow” and “pull” denote the behavior of activity in the workplace. Flow implies “a seamless sequence of activity throughout the process, with no stalls, no disruptions, and no disconnects or backtrack loops.” The principle of pull is activities “are done when they are required to be done, not before.” Lean Manufacturing activities are therefore consumption – driven or customer demand – driven, as compared with a forecast – driven system.

The essential principle of Lean Manufacturing is the continuous and ongoing elimination of waste. However, Lean Manufacturing redefines waste to include any wasteful activity. The goal is to eliminate any wasteful activity to ensure that all time and resources are devoted to additional value – added activity.

Bill has organized “Lean Manufacturing That Works” into two sections. The first part is titled “The What” and it carefully and thoroughly explains the ideas and logic of Lean Manufacturing to best define “what we are trying to accomplish.” The second part is titled “The How” and it defines and describes the tools, techniques, and best practices to most effectively implement and maintain a Lean Manufacturing process.

Bill explains that Lean Manufacturing is not a thing, an initiative, or some other discrete activity. To be effective, Lean Manufacturing must become integrated into the company culture. It is “a way of thinking, an overall philosophy of running a business.”

Bill has packed this 288 page book with dozens of charts, graphs, pictures, flowcharts, sample analyses, and real world examples to bring the Lean Manufacturing principles to life.

Naturally, the contents of this book are most relevant to industrial manufacturing companies. However, any manager or business person can greatly benefit from the Lean Manufacturing philosophy, whether you are assembling cars, bicycles, providing warehouse or logistics services, running an accounting office, or providing medical services. I highly recommend this book to any serious business manager.

Frank T.

Testosterone Inc: C.M. Byron 2005

“Testosterone Inc.” was published a decade ago, but it remains very relevant today. This book tells the very interesting and frequently sordid tales of four famous CEO’s: Jack Welsh CEO of GE, Ron Perelman CEO of Revlon, “Chainsaw” Al Dunlop CEO of Sunbeam, and Dennis Kozlowski CEO of Tyco.

Christopher Byron conducted diligent research for this book, and carefully documented his sources. Though this book does indeed reveal the many egregious moral and social failures of the four CEO subjects, it also provides considerable insight into the dark side of success and the role of unbridled ego in undermining principled leadership.

As I was reading this book, I found myself reflecting on the US Republican Primary campaigns. I would not be surprised if Byron or a future researcher / author chooses Donald Trump as a subject for a future “Testosterone Inc.” edition.

Throughout my professional career, I feel that I often learned as much or more about leadership and success from the mistakes and failures of my supervisors and managers as I did from their wisdom and successes.

Testosterone Inc. is a fascinating, exciting, and often thrilling “page turner” of a book. Having read several of Jack Welsh’s books many years ago, this book provided a completely new perspective on this “Rock Star CEO”.

I strongly recommend this book for any managers who are genuinely interested in leadership and governance.

Frank T.

Masters in Business Podcast (Bloomberg Radio): Barry Ritholtz

I have long been a believe in the old adage that “Leaders are Readers”. In order to be an effective leader, it is necessary to continuously upgrade and update your knowledge in the most broad sense. Readers are not necessarily leaders; the mere act of reading does not transform a bookworm into a charismatic champion executive anymore than diligently studying J.K. Rowling can turn a muggle into a gifted wizard.

However, it can be difficult for a busy executive or manager, or an aspiring leader, to budget adequate time to read the books, newspapers, professional magazines, and trusted online resources to gain access to the incredible wealth and diversity of information available in our modern and fast paced age.

I typically spend at least 6 hours each week driving. I used to listen to music during my long drives. However, early last year I decided to turn off the music and invest the hours I spend behind the wheel listening to podcasts.

For those individuals who are struggling to keep up with the diverse array of modern digital media choices, a podcast is basically an audio recording that is available for download to your smartphone, PC, music player, or other form of digital media player. Since I am primarily invested into the Apple ecosystem, my preferred source for podcast is Apple iTunes.

One podcast which I have greatly enjoyed and highly recommend to anyone with even a casual interest in investing or financial management is “Masters in Business” featuring Barry Ritholtz and published by Bloomberg Radio.

Each week Barry interviews a successful and influential business person, and explores the unique technical, professional, and personal views and attributes that have contributed to the success of the interviewee and his / her business.

Most of Barry’s interviews are conducted with Wall Street icons and financial leaders, such as Bill Gross of Janis Capital, Richard Thaler of the University of Chicago Booth School, and Nobel Laureate of Economics Professor Paul Krugman. However, he also interviews successful business people including Dallas Mavericks owner Mark Cuban and Restauranteur / Iron Chef Mario Batali.

Barry is an engaging interviewer who has a gift for facilitating entertaining and informative dialogs and discussions. Whether the discussion is about high speed trading, portfolio weighting theories, or the most important attributes of restaurant design, Barry encourages his guests to share their most valuable insights underpinning their business success.

I highly recommend podcasts as a supplement to traditional hardcopy or digital books and periodicals to maximize the productive time available for continued learning and self-improvement.

Frank T.

Switch – How to Change Things When Change is Hard: Heath and Heath 2010

Change is a vital process for any business or organization. The failure to adapt to a continuously evolving environment leads inevitably to failure and eventual extinction.

I’m always looking and listening for book recommendations. I had the privilege of attending the Thai IOD “Anti Corruption Conference” on 15 October. During the lunch break Professor Robert Klitgaard of Claremont Graduate University gave a very interesting presentation about countries that managed to change course, significantly reducing corruption, improving competitiveness, improving public engagement and confidence. During his presentation he referenced the book “Switch – How to Change Things When Change is Hard” by Chip and Dan Heath. I immediately added the book to my “Unread Books Collection.”

I have just completed reading “Switch”, and I can report that I found the book quite interesting and very useful. The authors did a great job of presenting an effective and practical template for achieving effective and lasting change.

“Switch” proposes that change is most effectively achieved by recognizing and responding to both rational and emotional elements, and then creating an process to enable, support, and sustain the desired change.

To most effectively and memorably introduce and explain their change template, they have created the metaphor of a Rider, an Elephant, and a Path.

The Rider is the rational human element. The Rider can be readily convinced of the needed change by presenting logical and analytical framework, but the Rider is also easily distracted and confused by excessive options or inadequate direction. The Authors recommend providing the Rider with clearly scripted critical moves and a precise vision of the destination or objective.

To most effectively determine the change which is required to achieve an objective, the authors discuss the concept of “Bright Spots.” Look for examples of success that can be replicated, such as an employee who is succeeding at a task where others are failing. Identify the key success factor and replicate it. Solutions for most problems typically already exist, but it often takes diligence and persistence to find the “Bright Spots” that illuminate the solution.

The Elephant is the emotional human element. The Elephant doesn’t readily respond to rational explanation; it must be motivated. Promote the change in a way which reaches the heart and feelings of the team. Massive change is inherently demotivating, so the authors recommend breaking down the change into smaller, more readily achievable milestones. This allows rapid and frequent successes along the path to the ultimate change destination.

Finally, the Authors recommend “Shaping the Path” to facilitate the change process. Behaviors change when the situation changes, so seek to change the situation or environment to most effectively and efficiently achieve the desired change in behavior. Seek “Action Triggers” to encourage behaviors to become habits. Rally the team or organization to adopt the change as a contagious behavior.

As I read “Switch”, I found myself frequently remembering occasions when I pursued or promoted change using either a rational, emotional, or process (path) based approach. However, I was rarely conscious of my choice of method to promote change, and I don’t believe I ever successfully combined and utilized all three change drivers simultaneously. Individual people are complicated, and teams and organizations are both complicated and diverse. It makes a great deal of sense to utilize all three change driving tools to best motivate and sustain the change process.

Frank T.

Thai IOD Chartered Director Class

The Thai Institute of Directors (Thai IOD) was founded in 1999 and has become the leading Thailand based organization promoting Director Professionalism and Corporate Governance.

www.thai-iod.com

I am a big fan of the Thai IOD, both for its significant contributions to leadership and Corporate Governance, and also for its strong commitment to anti-corruption and ethical behavior.

Last week I had the privilege of attending the Thai IOD’s “Chartered Director Class” (CDC). This is a two day course that is designed to “enhance directorship expertise by strengthening key knowledge and skills.” A prerequisite to attending the Chartered Director Class is the successful completion of the Thai IOD’s “Director Certification Program” (DCP), which is a 5 day intensive course covering the fundamentals of directorship and Corporate Governance.

The CDC class was organized as four (4) half day modules covering Accountability, the Art of Directorship, the Strategic Board, and Ethical Decision Making.

I’ve attended many professional development classes and seminars. However, with very few exceptions, the Thai IOD courses have consistently been the most rigorous and professionally managed programs I’ve had the privilege of attending. The Thai IOD prides itself on starting its programs on time, and fully utilizing the time allocated for each program module. Thai IOD programs are definitely not long coffee breaks periodically interrupted by brief lectures; these are intensive lectures and engaging professional dialogs with only brief interruptions for coffee and lunch. No, you won’t be going home early … sorry, you won’t beat the traffic. However, you can always be sure to derive maximum value from your time and monetary investment in a Thai IOD program.

The CDC program was facilitated by Dr. Bandid Nijathaworn, Banchong Chittchang, Professor Dr. Kriengsak Chareonwongsak, and Dr. Warapatr Todhanakasem. These four gentlemen each have very impressive professional and academic credentials, and are also quite gifted lecturers and facilitators. The facilitators, course materials, and case studies were all very well developed, organized, and presented.

Equally important to a professional development program is the quality of the participants. The Thai IOD is very successful in not only attracting and retaining the best quality facilitators, but also the best quality and diversity of participants. Our CDC class had fifteen men and women, Thais and foreigners, coming from a variety of professional and academic backgrounds. I felt privileged to have the opportunity to share this CDC experience with such distinguished and experienced peers.

The benefits of Directorship and Corporate Governance training are not limited to the Boards of Directors of Public or Listed Companies. Any professional manager, director, or leader of a listed or limited company can benefit from the skills, leadership, ethics, and governance fundamentals taught by the Thai IOD. These courses are not “cheap”, but they provide great value for both the individual participants and also for the organizations and teams of participants.

Frank T.